Batten down the hatches

Civitas, 21 December 2009

The change in times seems marked. In its 2002 command paper, Delivering the NHS Plan, the government adopted a new paradigm that choice and competition was the means to a more efficient and responsive service:

‘If it is to better respond to the needs of patients the NHS can no longer be run as a monolithic, top-down, monopoly provider… Patients will choose hospitals… [and] changes to the funding flows and incentives will… enable all providers – public or private – who offer good quality and value for money to more easily provide services for NHS patients…’

With tight financial times ahead, creating the political space for this market to work appears more important now than ever before.

‘Competition’ is mentioned only once in NHS 2010-2015: from good to great and does not even feature as a lever of system change in the Operating Framework. Instead, the route to higher productivity is sold as collaboration and ‘more engaging, less polarising ways of making change happen’.

The overall approach is best described as one of ‘technocratic rationalism’; a strategy that failed Labour between 1997 and 2002. The strongest levers for change identified by the Department of Health are: adjustments to the payment system (tariff); stronger regulation; further ‘goals’ for Primary Care Trusts; and ‘applying models of care systematically across the country’. All of these are centralising and negate the potential for entrepreneurial activity that now exists from the NHS’s more market-based structure. In fact, the Operating Framework goes so far as to state: ‘… organisations need to be entirely driven by existing commitments and NHS Vital Signs tiers 1 and 2’ (p.46), set by the DH.

Foundation trusts are to be encouraged to integrate with existing community services. This may improve coordination of care, but without reform to the payment system is equally likely to lock services in the expensive hospital setting; shut out alternative options; and create unresponsive local monopolies.

Primary Care Trusts (PCTs), that are supposed to be impartial commissioners of care, are now allowed to keep their own provider arms, despite being previously required by the DH to come up with strategies to make them independent. This creates a clear conflict of interest.

The ‘NHS first’ approach – that the NHS is the government’s ‘preferred provider’ of services, with tenders only put out if the service is ‘demonstrably underperforming’ after two chances to improve – is inconsistent with the government’s own principle that ‘commissioners (PCTs) have a legal duty to secure the best services, in terms of quality and productivity, for the people they serve’. What if this these services are not found in NHS providers? Many PCTs, who have found real benefit in using competitive tendering to improve services, will be harmed; and innovative potential new entrants will be discouraged.

David Nicholson, the NHS Chief Executive, in his concession to the Financial Times that “there is no doubt we need help [from the private and voluntary sectors] to transform services” appears to have grasped the implications, but the government wants to think otherwise.